tv Studio 1.0 Bloomberg July 5, 2015 6:00am-6:31am EDT
♪ emily: he is known as tech's turnaround guy. blackberry ceo john chen has spent more than 30 years working in enterprise technology. famously taking the enterprise software maker sybase from the verge of death to $5.8 billion powerhouse. now he has taken on what some say is an impossible job, leading blackberry's comeback. can he prove them wrong? and just how did he become the tech industry's fixer? my guest today on "studio 1.0" is blackberry ceo john chen. john, thank you so much for joining us. john: thank you for having me. emily: even though you're running blackberry in canada, the bay area is where you call
home. john: yes. emily: you technically live here. john: i live here. well, my family lives here. so i live all around. yes, it is our headquarters in waterloo, canada. emily: how much time do you spend here versus waterloo? john: i try to spend about a week a month in waterloo. we still have 5,000, 6,000 people over there in canada, in between waterloo and mississauga and ottawa. we are building a site here in silicon valley. so that is -- i spend about a week or so a month here. the rest of the time, i go around the world, seeing customers, meeting with analysts, investors, partners, distributors, and so forth. so that is why i do that. emily: part of the reason you are opening an office here is the talent, right? john: part of the reason we are opening an office here is so that we can get much closer to all that is happening. at silicon valley, there are a lot of great ideas. 90% does not go anywhere. but the 10% that goes anywhere
becomes the google of the world. so you really have to pay attention to what is happening in our industry, so you are not so insular or focused on our own thing. we have a lot of great technology, but you can't just say, this is it, this is the universe. so i intend to really broaden it and hire a lot more people here. emily: and you were born and raised in hong kong. john: mm-hmm. emily: tell me about your upbringing, your parents. john: ok, well, actually, i came from a relatively poor beginning, because my parents, although my father is quite educated, they were refugees from china. postwar, kind of where the communists were taking over before the curtain got drawn. so they escaped from shanghai to hong kong. emily: and you lived in a one-bedroom apartment? john: yes, we lived in a one-bedroom apartment for a long time. we did not even have a dining table, so to speak. you know, a refugee, so we put two suitcases on top of each other and put a piece of cloth or whatever it is over it.
and that was our dining table. emily: what kind of kid were you? what did you want to be when you grew up? john: i never thought about anything about what i wanted to be. i mean, i just thought that -- everybody at the time, by the way, because of the war and because of what happened historically to china and so forth -- everybody wants their kids to be scientists. that is the hong kong way, right? so everybody becomes an engineer or mathematicians or whatever. you know, doctors. just professionals, so you can have a good life. so i started off doing a lot of math. and i liked math. so i ended up studying engineering and have done reasonably well. emily: you went on to boarding school in massachusetts. john: yes. emily: how did that happen? one bedroom apartment, boarding school in massachusetts. john: yeah, by the time i was thinking of my education, the higher education, my family is already in kind of a middle income family.
my father was able to, you know, study english at night and accumulated some wealth. he invested in the silk business. he said, have you thought about what you are going to study? i said, probably engineering. he said, hong kong really isn't great in engineering. have you ever thought about going overseas? that's when it piqued my interest. and so i wanted to go to the ivy league. if you go to one of those, it enhances your chances of getting into the ivy league quite a bit. a lot of bit. not just quite a bit. so i went -- so i went to prep school. emily: that must've been quite a transition. hong kong to massachusetts prep school. john: i went from no snow to a lot of snow. it was quite a transition. it was great. it was the best thing that ever happened to me. emily: so when did you learn how to code? john: i actually learned it from high school. this is one of those things that a lot of american kids do not understand. the resources this country offers are dramatic as compared to every other country around the world. i do not know if it is still true or not.
but when i was in hong kong, we would never -- we might have heard of a computer, we had never seen one. we had never touched one. emily: you never saw a computer until you got to massachusetts? john: no, no. not until i came here. that was the first time i learned how to code. my last year of high school, my first year in the united states. emily: you ended up going to the ivy league. brown university. john: i went to brown. yeah. emily: electrical engineering? john: yes, electrical engineering. actually, i started my career as a manufacturing engineer. i started pretty much on the ground floor. and, you know, i went to caltech for my master's degree. and then i started working with this mainframe company called burroughs. and my first job was to fix things. emily: you started your career learning how to fix things. i am sensing a theme. you worked your way up. 30 years, you became ceo of sybase. how did you do it? i mean, along the way, what did it take? john: i actually like fixing things. i think it's both a challenge and also an opportunity to learn stuff.
because i am kind of the old-school, loyal, stick-with-it type of person. today's young people are a little bit more entitlement-oriented. you know, when we were growing up, we never thought about it that way. we thought that you have to create opportunity yourself. i tried to go and learn different areas. my first job is in doing, fixing manufacturing hardware. then i went into writing software. helping run factories. i have done a lot of different things throughout my career. emily: you took sybase from a $362 million company, on the verge of failure, to $5.8 billion. how did you do it? john: well, first of all, you have to have a very good team of people. and i spent a lot of time recruiting them and building the culture. you focus on things you do well. you focus on value you could add to the market. you stick with those for the long haul. you build it a step at a time. and at sybase, we were at the verge. i mean literally at the verge. but we came back.
emily: you bet on mobile before mobile was big. john: i bet on mobile in the year 2000. it was funny, i got people calling me, investors calling me, and telling me that the money that you have, company money, belongs to them. it didn't belong to me. and then for me to invest, and waste it in areas like mobile, you know, i may as well dividend it back to them. but thank god we did it. at that time, we were stuck at a value of $2 billion. mobile took us to almost $6 billion. emily: what was the hardest thing you had to do at sybase? john: the initial rounds of letting people go, refocusing the company, and being able to convince the remaining employees and the people that you try to recruit that there is a future. emily: and you eventually sold to s.a.p. john: yeah, eventually. long time. what, 13 years later? emily: people are telling you that blackberry is already dead.
♪ emily: you came out of sybase looking like a hero. and great ceo's, great executives, there is often a myth about them that is sort of boiled down to legend. what is the myth of john chen? and what is the reality? john: i actually think i'm a pretty simple, straightforward kind of guy. i mean, i like working with people. i like focusing on objectives and results. most people thought about, why are you doing this? the company is already dead. to me, it is just, i am just going to take one step at a time and do better every day. eventually, we will break through. i am actually a lot more relaxed than most people think. emily: people are telling you that blackberry is already dead? john: yes. emily: why did you take this
job? john: that is a great question. i think i flunked retirement. [laughter] john: that is probably the real -- i mean, there is a bunch of reasons. i could give you this reason about it being iconic in the industry, and it's a great company that has a lot of technology, therefore i think there is a lot of potential. all of that is true. but that does not automatically answer the question why i am doing it. i started as being the chairman of the company. i was going to find the management team and formulate a strategy. i thought i was a little too old to run around the world and play cowboys. but, you know, once i got into it, i find it is hard to just guide without doing. and we really do not have a lot of time to just, you know, find a team, and then a person, and think about the strategy. and all that. we just kind of have to get it done. so right, wrong, indifferent, i decided to become the ceo. emily: so you are not crazy?
john: i am not crazy. i think there is a lot of good potential here. it is not a done done deal. but i think we have made a lot of progress in the last six months. emily: is this part of your personality? you like to feel needed, like, to fix things? john: yeah. [laughter] john: it is probably the negative part of my personality. i am a little paranoid about not being needed and wanted. i guess, i think it is important to -- what i do every day, i know that it means something to people. emily: history has been cruel to phone makers. nokia, motorola, palm. what makes you think you can change history? john: well, by not following the same play. we are trying to broaden ourselves way beyond just the device, just a phone. i don't sit there and think, i could make another really great phone and somehow everything will be well. emily: but you did vow to keep making phones. john: oh yes, of course. this is part our strategy of end-to-end mobile computing for the enterprise.
i mean, you can say, i am so committed that even if i lost my shirt, i will do this. it does not make sense. but i think i could make money on the phone. and i hope that, by now, the industry realizes what i'm talking about. we have some really great phones coming out, very cool. but it is kind of our first point of entry, or one point of our big strategy of everything secure. that is our big strategy. and so the phone is part of it. i mean, our phone is the most secure phone, because of the way we make it, and the software we have. both hardware and software. and so i would like to continue to do that, but if i can be successful in it, i'm ok to work with somebody else to do it. emily: blackberry's global smartphone market share peaked in 2009 at 21%. it is less than 1% now. idc predicts blackberry market share is going to fall another 50% this year, down to 0.3% by 2018. are you going to change the
direction of that? john: i hope so. could i change it immediately? no. in many, many markets around the world, blackberry's are still the preferred phones. i will admit that, in north america, with the banks, some of the hospitals, and the governments, outside of that, we don't do well. i do see people in the professional world still using our devices. it is my job to recapture that interest and that loyalty. i think we have a shot at it. emily: in a future where chips are embedded everywhere, in our clothes, in the walls, do smartphones matter? do these numbers matter? john: smartphones will not matter on the long term. i think smartphones will -- i think devices will matter. you know, how things talk to each other. the whole internet of things is really real. it will be real. the question is how and who will make money out of it. it is not clear whether it is the traditional handset people. emily: you sold sybase to s.a.p. are you going to sell blackberry, too? john: so there is a standard
answer for public company officers. emily: give me the nonstandard answer. john: ok. the nonstandard? i would prefer to build a lot of value before i even contemplate that. emily: but as the ceo, you owe it to shareholders to consider offers. john: absolutely. it is only fair. it's not only the shareholders, it's also the employees. one thing i am proud of about sybase, is that the people who slaved away with me for so long, although selling to s.a.p. was not my desired outcome, i was hoping to build a really big and strong company. but it was the right thing. they gave us an offer that was very hard to refuse. emily: if you got a good enough offer? you would sell? john: if i got a good enough offer, i would. emily: what kind of offers have come across your desk? john: no, i don't have any offers that have come across my desk. emily: no? john: people like to talk. talk is not an offer. emily: would you sell to a chinese company? john: the answer is i would probably be unable to do that. one of our biggest install bases is the government.
in countries where government shares intelligence. i think there will be a lot of regulatory issues and concerns. and i appreciate that. emily: what do you think of the current state of u.s.-china relations, given the new regime in china today? john: i try to become a very constructive bridge between the two, if i can. i think the current status -- like every -- you know, u.s.-china relations are always full of challenges and opportunities. emily: when it comes to security and cyber security and the privacy of american citizens, who is more of a threat, china or the united states? to our own security. john: i think everybody is spying on everybody. i would think it is equally a big threat inside our country as it is outside our country. emily: what the nsa has been doing, as far as we know, their recent revelations, fair or unfair? john: if the intentions are truly for national security, i think it is fair.
because we don't want to do another setback. now, this is only a personal view. all right? this is not a blackberry view. emily: if the nsa wanted a backdoor to blackberry, would you open it? john: we don't have backdoors, and we would not do that. from time to time, the government wanted information from us, ok? first of all, we don't keep it around. that is number one. you need to know that. all right? and if we do it, it has to be under a court order. emily: have you ever had a moment where you thought, what did i get myself into? john: twice. [laughter] john: not just one time. yes, i have. ♪
well. yahoo!, they would look at it from the growth, revenue, and all that. if a company guided that way, that is one thing. but the question really needs to focus on, if the company's fundamentals become stronger in the long term. and i think i would focus on that. so from that perspective, it feels like they are doing the right thing. emily: so you think marissa mayer is doing a good job? john: i think it is a reasonable job. i don't know her very well. i mean, i met her a couple of times. yes. emily: you are also a father. you have four kids. what kind of a parent are you? john: i am very close to my children. i always enjoy time with them. i do not spend a lot of time with them, unfortunately, because of the job, the nature of the job, running around the world. thank god, they all grew up pretty good. i feel good about it. emily: how do they feel about you living half here, half in canada? john: i think my wife loves it. we have been married 34 years. you know, i think she is, sometimes she does not want to see me every day. it is good. if i go home early, she always
says, what's wrong? you are not feeling well? i say, no, i just want to come home early. i am serious. i am not making any of this up. anyway, they support me. if i'm happy, they're just fine. emily: what's an app that you can't live without? john: e-mail. emily: facebook or twitter? john: neither. emily: why not? john: i tried it. i got so hooked on it. i'm spending an entire living moment of my life on it. i can't do it. i need to stop. [laughter] emily: smart watch or no? john: no. no. i'm a traditionalist. emily: but you want your chips and everything. john: yeah, i am still a traditionalist. by the way, i want a chip in everything. i did not say i want to be tracked like that. ok? i did not say that. i think there is a certain amount -- there is a certain place for that, and then i want to have my own private moment in my own private life. emily: if you were not doing what you do now, what would you do?
what would you want to do? john: it would never happen again, because i am too old for it. i would love to go to law school. i was -- i actually wanted to be a lawyer at a certain point in time, but my father thought it was not a good profession. emily: when is the last time you were nervous? john: i am very fortunate. i think if anything were to happen to my family, i would be nervous. outside of that, there is nothing to be nervous about. emily: what is your guilty pleasure? john: cigars. everybody -- everybody -- i love having a cigar. one time, i played golf with my doctor. i finish a round and pull out a cigar. he looks at me and says, being your physician, i must advise you against this. i say, but i only smoke after i play golf, or getting a drink with some friends. he says, does it help your golf game? i say, not really, no. he said, ok, fine. emily: now that you have been doing this blackberry thing for almost a year, what do you give your own chances for success? john: if you are talking about being able to create value, i think i can do that. emily: 100%?
john: i would say better than 80/20%. how is that? i am comfortable where the company is today with how we manage our technology, business, the margin, the distribution channel, all the new product that is coming out. the strategy that gets into communicating a secure manner of all stuff over time. i think there is enough runway here for us. and we scale our expenses to a level that now allows us to stay back, invest, and make money. so i am comfortable with generating more value. whether it will be good enough to be iconic again, ok, that is something i need to chew on. i don't know the answer to that question. emily: being completely honest, have you ever had a moment, a single moment, where you thought, what did i get myself into? john: twice. [laughter] john: more than one time. yes, i had. after, like, the first 30 days, i said to myself, like, this is
-- i am running against time on so many things. but then i did not dwell on it for too long. i started putting a plan together and recruited a team and said, ok, just do one thing at a time. do not try to fix everything at the same time. that was once. and i could feel when i am kind of, my mind starts, not very focused. i could feel it. and right now, i am quite at ease with all of the plans we are working on. emily: how do you want to be remembered? john: somebody who could generate results. i would like to be remembered in the future that i did something that would make a difference. a lot of people benefited from my effort. if i can feel that, i'm good. i'm good. i don't need to be called anything. emily: john chen, thank you for so much joining us today on "studio 1.0." john: thank you. emily: great to have you. ♪
♪ francine: hello, and welcome to "inside fendi." we are in rome, and over the next 30 minutes, bloomberg brings you behind the scenes of one of the most iconic italian fashion houses, fendi, with the ceo pietro beccari. in 1925, two italians opened a fur and leather shop in rome. their names -- edoardo and adele fendi. the mantle passed to their five daughters, and is there where the fendi story really begins. under their watch, the company grew into a multimillion dollar luxury brand. although they had some help